OTTAWA, May 1, 2019 /CNW/ - At a time when Canada's GDP is slowing, a new report shows the vital connection between a growing economy and healthy public finances.
The sixth annual Total Tax Contribution survey, conducted by PwC Canada in partnership with the Business Council of Canada, offers insight into the role that large Canadian companies play in supporting public services, driving investment and providing well-paying middle-class jobs. The survey measures the overall economic impact of companies on public finances in a given year. The latest survey covers 2017, a year in which Canada's GDP grew by 3.0 per cent after inflation – the fastest pace in six years.
That strong performance translated into higher profits for some of Canada's largest businesses, which in turn drove a significant year-over-year increase in tax contributions and other payments to the federal, provincial and municipal governments. In total, the companies in the survey contributed $76.8 billion to governments across Canada, $8.5 billion more than in 2016 and $13 billion higher than in 2015.
To put this figure in context, the tax contributions and other payments by these businesses in 2017 were greater than combined federal spending in the 2017-2018 fiscal year on benefits for the elderly ($51 billion) and children ($23 billion).
"Currently, there is lot of public discussion around the impact of taxes paid by Canadian corporations on economic growth, the creation of jobs and the quality of life for all Canadians. This survey provides meaningful data to inform constructive debate and contribute to forward-thinking policy reform," said Peter van Dijk, National Tax Policy Leader at PwC Canada. "In particular, it demonstrates the urgent need for a comprehensive review of the tax system across the country with an eye to boosting Canada's overall global competitiveness."
"The latest Total Tax Contribution survey demonstrates the degree to which a growing economy helps sustain government investments in social programs and people," said Goldy Hyder, President and Chief Executive Officer of the Business Council of Canada. "Now more than ever, we need a serious conversation on how governments can work with business, labour and others to build a strategy for economic growth."
Earlier this year, the Business Council launched the Task Force on Canada's Economic Future to engage business leaders and a broad array of other stakeholders, including labour and indigenous groups, in advancing urgently needed policies to enhance growth and ensure a better future for all Canadians.
Another key finding from this survey is that these companies are responsible for a significant share of the capital investment that enhances Canada's future economic capacity. In 2017, the 83 companies that participated in the survey collectively invested $39.6 billion in machinery, equipment, new buildings and other physical asset –representing 16.5 per cent of total business investment in Canada for that year. Capital spending levels were highest in the technology and communications, forestry and mining, and oil and gas sectors.
In addition, this group of businesses play a vital role in supporting good middle-class jobs. The 83 companies surveyed employed more than one million Canadians and paid an average wage of nearly $67,000, which is 32 per cent higher than the national average.
About the Business Council of Canada
Founded in 1976, the Business Council of Canada is a not-for-profit, non-partisan organization representing business leaders in every region and sector of the country. The Council's member companies employ 1.7 million Canadians, contribute the largest share of federal corporate taxes, and are responsible for most of Canada's exports, corporate philanthropy, and private-sector investments in research and development. Through supply chain partnerships, service contracts and mentoring programs, Business Council members support many hundreds of thousands of small businesses and entrepreneurs in communities of all sizes, in every part of Canada. Please connect with us on LinkedIn or Twitter and subscribe to our recently launched podcast, Speaking of Business.
About PwC Canada
At PwC, our purpose is to build trust in society and solve important problems. More than 7,000 partners and staff in offices across the country are committed to delivering quality in assurance, tax, consulting and deals services. PwC Canada is a member of the PwC network of firms with more than 250,000 people in 158 countries. Find out more by visiting us at www.pwc.com/ca.
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